Earlier today, Morgan Stanley announced that it will implement a net reduction in force of about 600 workers after the firm restructures its mortgage business. This decision will impact roughly 500 employees in the U.S. and 100 more in Europe. Of the 100 cut in Europe, 9/10ths of them will come from the U.K. mortgage unit. In the United States, MS has 3 mortgage businesses: Saxon Capital, Morgan Stanley Credit, and Morgan Stanley Mortgage Capital Holdings. These units will now operate as 1, which will originate, purchase, and service a wide range of mortgage products.
In light of this news, the stock has added nearly 4%. The problem is today's run higher was capped by MS's descending 20-week moving average. The last time the stock finished a week above this trendline was the middle of July. Furthermore, the stock would face resistance at the 68 level should it power through its 20-week trendline.